FDX (Fedex Corp) Stock Analysis: Solid Valuation, But Is It a Buy Now?

FDX (Fedex Corp) stock is part of the S&P 500, with a market cap of $59.3B and a reasonable P/E ratio of 15.70, indicating fair valuation. While EPS growth (15.71% next year) looks promising, recent earnings have declined (-7.18% YoY EPS drop), and the stock has been underperforming (-12.48% YTD).

With a 2.21% dividend yield and long-term growth potential, the question is: Is this an undervalued opportunity or a stock in decline? Let’s break it down.

Fundamental Analysis

Valuation Metrics

• P/E Ratio: 15.70 (Fairly valued, not overbought)

• Forward P/E: 11.24 (Lower, suggesting future earnings growth)

• PEG Ratio: 1.43 (Moderate growth at a reasonable price)

• Price-to-Sales (P/S) Ratio: 0.68 (Undervalued relative to revenue)

• Price-to-Book (P/B) Ratio: 2.24 (Reasonable valuation compared to assets)

📌 Key Takeaway: This stock is fairly valued, with potential upside based on future earnings growth.

Profitability & Growth

• Gross Margin: 21.30% (Decent, but not exceptionally high)

• Operating Margin: 6.79% (Average profitability)

• Net Profit Margin: 4.44% (Not bad, but room for improvement)

• EPS Growth (Y/Y): -7.18% (Earnings declined, raising concerns)

• EPS Growth (Next Y): 15.71% (Expected recovery, positive sign)

📌 Key Takeaway: While last year’s earnings dropped, future earnings growth is expected to be strong.

Dividend & Payout Ratio

• Dividend Yield: 2.21% (Decent for income investors)

• Payout Ratio: 29.25% (Sustainable, leaving room for reinvestment)

📌 Key Takeaway: The dividend is safe and offers stable income potential.

Financial Strength

• Current Ratio: 1.23 (Enough liquidity to cover short-term obligations)

• Debt/Equity Ratio: 1.41 (Moderate debt level, not alarming)

• Short Interest: 1.64% (Not a major short squeeze candidate)

📌 Key Takeaway: Financially stable, but debt levels should be monitored.

Technical Analysis

Trend & Momentum

• SMA 20 (Short-Term): -1.57% (Mild weakness)

• SMA 50 (Medium-Term): -5.63% (Stock is still in a downtrend)

• SMA 200 (Long-Term): -10.83% (Bearish, but stabilizing)

• RSI (14): 41.58 (Neutral, but close to oversold)

• Beta: 1.25 (Moderate volatility, moves with the market)

📌 Key Takeaway: The stock is still in a downtrend, but momentum is stabilizing.

Support & Resistance Levels

• 52-Week High: $313.84 (-21.55%)

• 52-Week Low: $239.50 (+2.80%)

• Support Level: $240.00 - $245.00 (Key accumulation zone)

• Resistance Levels: $270.00, $311.32 (target price)

📌 Key Takeaway: The stock is near a key support level and could be a buy if it holds.

Trade Setup & Plan

📌 Entry Point

• Buy Zone: $240.00 - $250.00 (Near support, accumulation area)

• Confirmation: Look for higher volume at support levels.

🎯 Profit Targets

• Target 1: $270.00 (+10%) (First resistance level)

• Target 2: $311.32 (+26%) (Analyst target price)

• Target 3: $320.00 (+30%) (52-week high target)

🛑 Stop-Loss Strategy

• Conservative Stop: $235.00 (Break of support signals further downside)

• Aggressive Stop: $230.00 (More risk-tolerant traders can use this level)

💡 Risk-Reward Ratio: ~3:1(Moderate risk with strong upside potential.)

Buy or Avoid?

✅ Why Buy?

• Fair valuation (P/E 15.70, Forward P/E 11.24)

• Earnings growth expected (15.71% next year)

• Dividend yield (2.21%) is safe with a 29.25% payout ratio

• Stock near support, possible rebound soon

❌ Risks to Consider

• Stock is still in a downtrend

• Last year's earnings declined (-7.18%)

• Moderate debt (D/E 1.41), but manageable